Opay, PalmPay, and More Issue Cautionary Notices to Customers Regarding Crypto Trading

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Nigerian fintech firms are cautioning their users against participating in cryptocurrency or any virtual currency trading through their platforms, threatening to suspend accounts engaged in such activities. Specifically, Opay, Moniepoint, PalmPay, and Paga have relayed this directive to their users as of Friday.

Recently, the Central Bank of Nigeria imposed restrictions on major fintech players like Kuda, Opay, PalmPay, and Moniepoint, preventing them from accepting new customers. This action from the CBN is associated with an ongoing evaluation of the Know-Your-Customer procedures of these fintech companies. These firms have been facing increased scrutiny in recent months due to concerns regarding potential involvement in money laundering and the financing of terrorism.

Prior to the Central Bank of Nigeria’s directive, the Economic and Financial Crimes Commission (EFCC) secured a court order to freeze a minimum of 1,146 bank accounts belonging to different individuals and companies reportedly engaged in illicit foreign exchange dealings.

In a notice released on Friday, OPay announced its intention to enforce stringent actions against customers found breaching its policy, which mirrors the stance adopted by the Central Bank of Nigeria concerning cryptocurrency trading.

“In compliance with the CBN directive, please note that OPay prohibits any cryptocurrency and all virtual currency trading. Any account engaging in such activities will be closed, and customer information will be shared with regulatory authorities.

“Please ensure that your account does not involve any cryptocurrency or any other virtual currency transaction,” the fintech firm warned.

Following a similar course of action, Paga, a fintech company with a track record of processing transactions totaling $32 billion over 15 years of operation, conveyed in an email to its clientele, “As a Paga account holder, please ensure that your account is not utilized for cryptocurrency and virtual currency transactions. Paga accounts found in contravention of this regulation will be subject to suspension.”

PalmPay, another prominent player in the industry, reiterated a similar stance via an emailed statement, stating,

“We strongly advise against using your PalmPay account for transactions involving cryptocurrencies or any other virtual assets. Please be advised that failure to comply with these regulations may result in the suspension of your account.

“Our team is diligently working to ensure full compliance with all regulatory directives, prioritizing the stability and integrity of our platform,” the fintech stated.

In Lagos on Thursday, Tosin Eniolorunda, the founder and CEO of Moniepoint, urged participants in cryptocurrency peer-to-peer (P2P) transactions to cease their activities, citing the financial sector’s prohibition on such transactions.

“This is a self-reflection of our industry. As you know, fintech apps are used for fraud. One of the things that led to the most recent announcement is that crypto players were manipulating the naira, especially with the P2P market,” he said.

In recent developments, major players in the fintech sector were summoned to Abuja for discussions regarding Know-Your-Customer (KYC) protocols, emphasizing the heightened regulatory scrutiny facing the industry. Additionally, the apex bank took action against cryptocurrency exchange Binance in February following accusations of manipulating the naira exchange rate.

Before Binance ceased operations, CBN Governor Olayemi Cardoso disclosed that an estimated $26 billion had been transacted through Binance Nigeria from undisclosed origins within a year.

Moreover, the CBN, in collaboration with the Office of the National Security Adviser (ONSA), announced a partnership aimed at investigating and penalizing individuals involved in illicit activities within the foreign exchange (FX) market.

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